Unlimited breadsticks and never-ending pasta bowls, anyone?
More and more Americans — especially millennials — are saying “yes” to that proposition.
That customer enthusiasm has helped push Olive Garden to its 11th consecutive quarter of same restaurant sales growth, according to parent company Darden Restaurants, Inc.’s fourth quarter earnings call.
Same restaurant sales growth was 4.4% for the past quarter ending May 28.
Calling Olive Garden a “once in a lifetime restaurant brand,” CEO Gene Lee noted that Darden’s flagship restaurant concept is enjoying record high guest satisfaction with promotions like giant stuffed pastas really hitting the mark with guests.
In addition, Olive Garden’s to-go business is on fire with 16% growth.
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The guests are skewing younger and younger
Here’s a trend that bodes well for Olive Garden’s future!
“Guests still want to come to restaurants,” Lee said. “Believe it or not, millennials still want to come to restaurants. I know you don’t think millennials go to casual dining restaurants, but 30% of all of our guests are millennials.”
Olive Garden is testing delivery with Amazon Prime
While news of Amazon’s plan to buy Whole Foods Market rocked the grocery world, the restaurant sector isn’t as worried about the mega-merger.
“The only way Amazon’s in our world right now is through Amazon Prime delivery; we have a test going with them,” Lee says. “We’ll continue to partner with them and see if we can make that work; we constantly sit around here thinking about how does Amazon have an impact on our business.”
Guest satisfaction is at an all-time high
Lee says guest satisfaction started a slow upward climb some 18 months ago and that positive momentum continues right through to today.
The reason for increasing satisfaction? Simplified operations that result in your food getting to you quickly.
“We’ve made these restaurants easier for our managers to run and easier to execute the food where we’ve brought the menus in a little bit,” he notes. “And so you focus the demand in on fewer items, you become better at delivering them and you are much faster.”
The good news for guests is that Lee expects this simplification to continue and create even better experiences to come.
“We’re not done yet, we still think we can make these operations simpler.”
Olive Garden wants to be the cheapest game in town
Olive Garden has a simple mission to deliver on each day: Keep the prices low and undercut the other guys.
That’s put the hurt on competing restaurants.
“I would say that we have some large competitors out there that are donating significant share. And we’re stealing, I would say, we’re stealing that share because I think that we’ve got a more compelling offer; Olive Garden is really after that value consumer,” Lee observes.
“And so I know it’s not fancy or sexy, but it really comes down to just pure execution and those who continue to execute at [the] highest level continue to win…We just need to stay on our plan, which is to underprice inflation, take cost out of the business to cover that and win market share each and every year.”
There’s a lot of excitement around corporate sibling Cheddar’s
Back in March 2017, Darden announced plans to acquire Cheddar’s Scratch Kitchen — a made-from-scratch casual concept with 165 locations across 28 states.
At the time, Lee anticipated that Cheddar’s might one day become second in importance only to Olive Garden itself in Darden’s stable of brands.
“We definitely think that Cheddar’s long-term will be the number three brand,” Lee said during the company’s third quarter earnings call in March. “It could possibly be the number two brand inside the portfolio.”
Three months later, that initial excitement has only intensified.
“Our focus here in the next 18 months is to get this [Cheddar’s] integration completed correctly and build human resources capabilities, so we can grow this brand,” Lee enthuses. “This is a powerful brand. It’s doing 6,300 guests a week. There is no one out there in casual dining doing that kind of volume. This is exciting for us.”